If you regularly use credit cards or borrow money through a bank loan, you may already have a recorded credit score. Your credit score Philippines is a number that represents your creditworthiness. This can impact your ability to get any form of financing from sources such as bank loans and credit cards.
Suppose this is your first time hearing about credit scores; fear not. This article will explain everything, the process of computing your credit score and how to check your credit score.
Credit Score Philippines and How It is Computed
A credit score is a three-digit number representing a person’s ability to loan or to pay off a loan based on the information in a credit report. Is there such a thing as a credit score in the Philippines? Unlike countries in Europe, the U.S., Canada, and Australia, the Philippines has no unified or standard credit reporting system. However, the Credit Information Corporation (CIC) keeps all the credit scoring in the Philippines.
The banking system depends on the CIC and its bureaus in the computation of credit scores based on these five criteria:
1. Credit payment history – This is based on how regularly you pay your loans, how much is repaid, and if payments are on time or delayed.
2. Credit utilization ratio (amount owed) – How much credit limit is spent, and if credit cards are maxed out. This means a person will likely miss loan repayments and get a low credit score.
3. Length of credit history – The average credit card and loan amounts and the time since they were used.
4. Types of credit used – The types of loans you have availed, such as housing loans, auto loans, mortgages, etc. This information gives lenders an idea of how responsibly you handle different credit types.
5. New credit – How often do you open new accounts, and how many credit cards or loans do you apply for simultaneously?
These factors are not included in the calculation of credit scores Philippines:
- Non-credit banking information includes non-credit accounts, prepaid cards, debit cards, investment accounts, checking accounts, and personal savings accounts.
- Affiliations (political, ethnicity, race, religion)
Maintaining a good credit score means you will quickly get approved for loans because all banks, financial institutions, and insurance companies use credit scores to assess a borrower’s credit risk. Philippine credit scores range from 300 to 850, with 850 being the highest rating. Landing a score between 700 and 850 is excellent, though the most realistic good score is usually between 759 and 800. Landing between 650 and 699 is good as well. Anything lower than 650 is considered a bad score.
Credit Report Philippines: How Does the System Work?
The Credit Information Corporation (CIC) was created through Republic Act 9510, or the Credit Information System Act. The CIC is the only centralized credit data registry in the Philippines’ credit system. It is authorized to collect, consolidate, and share credit information with all financial institutions in the Philippines. The CIC collates financial information from companies involved in financial transactions like banks, cooperatives, insurance firms, and telecom, and all these forms into detailed credit reports. Authorized lenders can access credit reports from the CIC.
The CIC has three accredited credit bureaus that act as unique accessing entities to compute credit scores in the country:
- CIBI Information, Inc.
- CRIF Philippines
- TransUnion Philippines
How to Check Credit Score Philippines
Anyone can request their credit report or credit score for a minimal fee from the CIC. To check your credit score, you can request a credit report from CIBI Information, Inc., since they are the only consumer credit report with credit score information.
1. Open the Credit Information Corporation’s website – creditinfo.gov.ph
2. Click “Services” on the homepage and select “Get Your Credit Report.”
3. You will be asked to present a valid government-issued I.D. and provide pertinent personal information (full name, birth date, and contact details).
4. Review all information entered and confirm your registration.
5. After receiving an email notification of the successful registration, select a preferred date of appointment and enter the required personal information.
6. Wait for an email confirmation with details of an online character verification appointment through Google Meet.
7. On the scheduled online appointment with the CIBI in-house verifier, log in to Google Meet.
8. Pay for the credit report through any CIBI payment channels.
9. CIBI will email the credit report containing your credit score.
A credit report contains basic information like your full name, TIN, SSS or GSIS number, place of residence, employer, or business. The detailed information will include all loan transactions with lending institutions, utility subscriptions, and other obligations the CIC is authorized to collect.
Some Frequently Asked Questions about Credit Reports
Can other people see or request my credit report?
Your credit report can only be accessed with your explicit permission and authorization. This access is limited to yourself and the financial institution you transact with.
How often does the CIC update a credit report?
In line with Rule 4.2 of the Implementing Rules and Regulations (IRR) of R.A. No. 9510, the participating entities shall submit regular updates on any borrower’s credit data within 30 days of making it available to them by their data subjects/borrowers.
Can my credit report be used by others and for other purposes beyond what I allowed it to be used for?
No. Once a credit report has been used for a specific transaction and said transaction is completed, the report cannot be reused, recycled, passed on, or sold to be used in any other way. Using a credit report is limited by the authorized person’s request and used only for a specific purpose and duration.
Can I refuse to have my data submitted to the CIC?
No. The CIC’s collection of a person’s credit data submitted by various lending institutions and service providers is covered by R.A. 9510.
Can I improve my credit score?
Improving your credit score can only be achieved after a while, but it’s never too late to handle your finances responsibly. If you get a good credit score, you must have the score and data erased to start a clean slate. To improve your credit score:
- Pay all your bills and debts on time – Late or unpaid monthly payments, especially with utility and credit card bills, and an ongoing loan will harm your credit score. Also, never default on any loan until your assets are confiscated. This drastically lowers your credit score.
- Keep your credit card balance low – High credit card balances can harm a credit score. Pay off all monthly balances on your credit card debt, or at least as much as possible. Avoid using your credit card for unnecessary purchases, and never max out any credit card.
- Avoid too many credit inquiries – When applying for a credit card or loan, lenders must perform a credit inquiry to check your creditworthiness. Too many credit inquiries in a short period will harm your credit score. This happens when you apply for multiple credit cards or loans quickly.
- Monitor your credit report regularly – To ensure all your credit information is accurate and up-to-date, periodically monitor your credit report. After receiving your credit report from the CIC, review all details carefully for discrepancies or errors. If you notice any issues, contact the credit bureau immediately to correct the information.
Understanding how to improve a credit score in the Philippines is essential for anyone wishing to support themselves financially. Thankfully, you can take plenty of steps to help you build up your credit score. This includes regular repayments, keeping track of your credit use, and making sure that you check for any mistakes or fraudulent activity on your report. Taking these steps will give you better control over your finances and allow you to apply for loans or mortgages confidently. Overall, it is highly beneficial to understand the basics surrounding credit scores to use them in practice and secure both short-term and long-term financial goals.
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